"2009 was a significant year for the municipality's fiscal planning. In 2008, the community had effectively reached build-out, which meant two things: growth came to a halt, and with it, the revenues that accompanied growth. Council, staff and the community wanted to know what it would take to live within our means."
- Dec. 1, 2009 administrative report to council on the Five Year Financial Plan 2010-2014
The budget for 2011 is going to be another challenge for the Resort Municipality of Whistler as it attempts to live within its means.
Like everyone else in Whistler, the municipality spent years preparing for the 2010 Olympics and Paralympics. A municipal office specifically dedicated to the Olympics was established, with an annual budget of between $750,000 and $1 million.
Capital spending by the municipality ramped up in the years prior to 2010 as major projects such as the sewage treatment plant upgrade, Olympic Plaza and the day skier lots had to be completed before the Games. Capital expenditures jumped from $4 million in 2005 to $13 million in 2006, $47 million in 2007, $54 million in 2008 and $39 million in 2009.
Spending on infrastructure maintenance also rose leading up to the Games. It was just $4 million in 2004, rising to $5.7 million in 2005, $7.8 million in 2006, $10.7 million in 2007, $4.9 million in 2008 and $8.5 million in 2009.
And just as significantly, capital spending and infrastructure maintenance prior to 2010 drew down municipal reserves, which now need to be rebuilt.
Given the context of the Olympics and the opportunity the Games presented for Whistler, this type of spending was justified. But it couldn't continue beyond 2010.
In the months following the Olympics, with the big target now in the rear-view mirror, most of Whistler has been taking stock and contemplating: where do we go from here? The municipality is in a similar position with its budget. Funding from senior governments for Olympic-related projects has dried up. Build-out has been reached and the revenue that new development produced ($7.4 million in 2006, $10.2 million in 2007, $10.2 million in 2008, $4.3 million in 2009) is winding down.
In anticipation of build-out and the end of Olympic funding the municipality lobbied long and hard for new "financial tools." Eventually they were delivered in the form of an additional chunk of the hotel tax, a measure that reflects - to some degree - the success of Whistler. As hotel revenues increase, hotel tax revenue to the municipality increases.
The municipality's revenue from hotel tax increased from $3 million in 2005 to $6 million in 2006, $11 million in 2007 and $11.2 million in 2008. And then the recession hit, dropping hotel tax revenue to $9.6 million in 2009. For 2010, revenue of $9.9 million was anticipated from the hotel tax.
While some revenue streams have been declining, the municipality's payroll has been increasing, from $22.6 million in 2008 to $23.7 million in 2009. Another $1 million increase was budgeted for 2010, for retroactive changes to firefighters pay rates between 2007 and 2009 and three to four per cent pay rate increases the municipality is contractually obligated to fulfill.
Just as capital and infrastructure spending prior to the Olympics was critical, ensuring staffing levels and services were up to speed for the Games was important. And they remain important. However, in the post-Olympic world they should be reviewed. The number of municipal employees making more than $75,000 grew from 47 in 2007 to 61 in 2008 and 69 in 2009.
As every property owner knows, tax increases have helped cover the spending and budget shortfalls in recent years. After years of little or no property tax increases they jumped 5.5 per cent in 2008, eight per cent in 2009 and seven per cent in 2010. In addition to the combined 20.5 per cent increase in property taxes over three years, utility rates were increased during this period.
Council members and the municipality's finance department are acutely aware taxpayers are nearing the tipping point as far as tax increases and, to their credit, have been looking for other sources of revenue. That was part of the motivation behind the introduction of pay parking. It was expected to bring in nearly $1 million in 2010.
How close - or far - the final numbers are to that projection will be one more factor in the complex equation of what it takes to live within our means. The public will be invited to participate in the process of solving that equation over the next month and a half.